Insights

Bitcoin’s ongoing rally not derivatives or leverage driven

exchange68September 13, 2024

0 0 1 minute read

Quick Take

Many discussions have been around whether the recent Bitcoin rally is spot or derivatives driven.
With the recent insight yesterday showing considerable spot accumulation on Coinbase, we can confirm it is not being driven by derivatives — which is exceptionally healthy.
The Estimated Leverage Ratio is the ratio of the open interest (OI) in futures contracts and the balance of the corresponding exchange.
We are yet to see a meaningful build-up of OI — while the leverage ratio across exchanges is below the average of the past three years.
OI is less than 400,000 Bitcoin below the three-year average — while OI is currently 2% the size of the Bitcoin market cap.

Estimated Leverage Ratio: (Source: Glassnode)

Analyst

James Van Straten

Former Lead Analyst at CryptoSlate

James fervently appreciates data, technology, and trend-spotting. As a tech and liberty maximalist, he hails Bitcoin as the 21st century’s paramount invention.

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